In-person payments involve more moving parts than Tap to Pay suggests. The terminal reads the card, but it’s one of many components, including point-of-sale (POS) software, payment hardware, network infrastructure, and security certifications. Each of these requires its own evaluation. Retailers who treat hardware selection as an afterthought can have reconciliation problems, compliance gaps, or equipment that doesn’t fit how their staff works.

The global POS market is projected to grow from $44.60 billion in 2026 to $138.92 billion by 2034. Below, we’ll discuss how payment terminals work, how to evaluate hardware for your specific retail environment, and what compliance standards apply to card-present transactions.

Key takeaways

• Payment terminals and POS systems are distinct from one another; terminals handle card reading and authorisation, while POS systems manage inventory, receipts, and reporting.

• Hardware selection depends on your retail format. Fixed checkout lanes, mobile selling floors, kerbside pickup, and pop-up environments each require different devices and connectivity options.

• Compliance with the Payment Card Industry Data Security Standard (PCI DSS) is a baseline requirement for any retailer that accepts card payments.

What is a payment terminal?

A payment terminal, commonly called a POS payment machine, is the physical device that reads payment credentials and initiates the authorisation request that moves money from a customer’s account to yours. Terminals come in a few configurations, each suited to a different retail environment, including the following:

• Countertop terminals: Fixed, wired devices for accepting payments at checkout counters.

• Portable terminals: Payment acceptance devices that aren’t fixed and operate over Bluetooth or Wi-Fi networks. They’re useful when staff are moving around a sales floor or handling tableside payments.

• Smart terminals: Portable devices with touch screens, built-in receipt printing, tip prompting, and app support that run on Bluetooth or Wi-Fi. Stripe Terminal’s BBPOS WisePOS E and Reader S700 fall into this category, with customer-facing displays and support for custom checkout experiences.

How do POS payment machines work?

When a customer presents a card, the terminal reads payment credentials through the available input method: chip, tap, or swipe. Europay, Mastercard, and Visa (EMV) chip cards and near-field communication (NFC) contactless payments generate a unique transaction code for each payment. Digital wallets use the same NFC channel and pass on a token rather than actual card data.

Once the terminal captures the credentials, it sends an authorisation request through your payment provider to the card network, which routes it to the issuing bank. The bank approves or declines based on available funds, fraud signals, and account standing, then sends the decision back through the same chain.

Settlement is a separate step. Approved transactions accumulate throughout the day and are captured in a batch. Funds arrive in your account within one to two business days, depending on your processor’s schedule. The amount deposited is a net figure; it reflects the transaction amount minus interchange and processing fees, which vary by card type, entry method, and your monthly volume.

What types of POS systems do retailers use?

A POS system handles inventory management, employee permissions, receipt generation, discount logic, loyalty programmes, and sales reporting. Contemporary retail setups pair a POS with a dedicated terminal, but they’re distinct layers with different selection criteria.

Here are the main types:

• Cloud-based POS: Runs on internet-connected hardware (e.g., iPads, Android tablets) and stores data remotely. Updates happen automatically, multilocation data is centralised, and you can pull reports from anywhere.

• On-premise POS: Stores data locally and processes transactions without a consistent internet connection. These systems are slower to update and harder to scale, but some retailers in low-connectivity environments still depend on them. Many cloud POS systems support offline transaction queuing as a fallback.

• Mobile POS: Tablet- or phone-based systems that sync store data from anywhere. These are useful as central hubs during high-traffic periods, floor selling, and pop-up retail.

What is a mobile payment terminal?

A mobile payment terminal is a card reader designed to pair with a smartphone or tablet; it accepts payments without fixed checkout infrastructure. The reader connects via Bluetooth, and a companion app on the mobile device handles the transaction interface and receipt delivery.

These devices have specific use cases in retail where fixed terminals might not make sense:

• Pop-up and market retail: No fixed location means no permanent terminal. A mobile reader and a smartphone are the entire checkout setup.

• Queue busting: During peak periods, floor staff with mobile terminals can process payments in the queue before customers reach the till, which reduces wait times without adding checkout lanes.

• Kerbside pickup: Staff can meet customers at their vehicles to complete transactions.

• Warehouse and stockroom sales: Some retailers sell discontinued inventory or bulk items from non-floor locations where installing a fixed terminal might not make sense.

With Tap to Pay, a retailer’s smartphone serves as the NFC reader, which eliminates the need for external hardware. It’s a newer capability that reduces hardware costs to zero. While it’s not yet universally available across all devices and operating systems, coverage is expanding. Visa reported a 200% increase in Tap to Phone payments in 2025 compared with the previous year.

How do you choose payment hardware for your Retail environment?

When you choose payment hardware, you’ll want to match device capabilities to your physical environment, Transaction volume, and how your Checkout connects to the rest of your systems.

Work through these areas before you commit to any hardware:

• Form factor: Each configuration—fixed counter, Mobile selling floor, outdoor, or some combination of them—calls for a different device type. Countertop terminals suit high-volume fixed checkouts; portable solutions work better for floor staff.

• Connectivity: Ethernet-connected devices are typically reliable for fixed checkouts. Bluetooth and Wi-Fi can introduce latency and potential dropouts.

• EMV and contactless certification: Any terminal that’s deployed where EMV is standard should Support chip and NFC payments. Customers who pay with digital wallets—a large component in some Retail categories—require contactless-capable hardware.

• Durability: Warehouse and outdoor environments demand more from hardware. Check operating temperature ranges, drop ratings, and whether the device is rated for high Transaction volumes.

• POS Integration: A terminal that doesn’t communicate with your POS creates reconciliation work. Many cloud POS platforms maintain certified Integration lists. Verify compatibility before you purchase.

• Customer-facing display: Tip prompting, itemised line review, and digital Receipt options all require a screen the Customer can see. Smart terminals handle this without a separate display unit.

Multilocation retailers should prioritise fleet consistency over the Individual device decision. Running the same hardware model across locations reduces the training burden, simplifies troubleshooting, and makes replacement straightforward.

What compliance and security standards apply to in-person payments?

Certain standards and certifications apply to in-person payments. Here’s what to know.

PCI DSS compliance

The PCI DSS governs how cardholder data is stored, transmitted, and processed. Every business that accepts card payments is subject to it, regardless of size. Payment providers handle a substantial portion of PCI scope on your behalf, but you’re still responsible for your own network environment and device handling practices.

EMV certification

This is a hardware and software standard with real financial consequences. In many markets, liability for counterfeit card fraud falls on whichever party in the transaction chain didn’t support EMV. If a customer uses a chip card when your terminal accepts only magnetic stripe and that transaction is fraudulent, you bear the loss.

Point-to-point encryption (P2PE)

Cardholder data is encrypted the moment a card is read and stays encrypted until it reaches the processor’s decryption environment. Because the data is never readable within your own systems, P2PE-certified terminals can reduce your PCI scope, which simplifies compliance audits for larger retailers.

NFC tokenisation

Contactless payments via digital wallets transmit a one-time token rather than actual card numbers. Even if the transaction data were intercepted, it couldn’t be reused. That makes contactless acceptance a more secure choice.

How Stripe Terminal can help

Stripe Terminal allows businesses to grow revenue with unified payments across in-person and online channels. It supports new ways to pay, simple hardware logistics, global coverage, and hundreds of POS and commerce integrations to design your ideal payment stack.

Stripe powers unified commerce for brands like Hertz, URBN, Lands' End, Shopify, Lightspeed and Mindbody.

Stripe Terminal can help you:

• Unify commerce: Manage online and in-person payments on a global platform with unified payment data.

• Expand globally: Scale to 24 countries with a single set of integrations and popular payment methods.

• Integrate your way: Develop your own custom POS app or connect with your existing tech stack using third-party POS and commerce integrations.

• Simplify hardware logistics: Easily order, manage and monitor Stripe-supported readers, wherever they are.

Learn more about Stripe Terminal or get started today.